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2023 (12) TMI 533 - AT - CustomsLevy of penalty u/s 114(iii) of the Customs Act, 1962 and Section 114AA of the Customs Act, 1962 - export of goods at highly over invoiced values - availing undue export incentives - HELD THAT - All merchandise entering or leaving the country must do so through authorised entry/exit ports, report to Customs, and follow all applicable laws and regulations, including paying any customs that may be due. Infractions are also subject to civil and criminal fines, according to the Customs Act. Criminal liability can result in incarceration and financial penalties, while civil liability can result in monetary fines and the seizure of property. The nature of the punishment depends on the gravity of the offence, with penalties for improper import or export of goods outlined in Sections 112 and 114 of the Customs Act. A perusal of the provisions of section 114 and 114AA makes it clear that any action by any person which renders imported or exported goods to confiscation is liable for penal action under section 114 of the Customs Act. In addition, any person who has signed a false or incorrect document is liable for penalty under section 114AA of the Customs Act. The Customs Act deals with the Confiscation of goods and conveyances, and imposition of penalties . It is further significant to note that the Legislature has simplicitor used the word any person to fasten the liability of a penalty. The Customs Act has not defined the word person and, therefore the definition and rules of interpretation contained in the General Clauses Act, 1897, can be taken recourse to. Hon'ble Apex Court in the case of OM PRAKASH BHATIA VERSUS COMMISSIONER OF CUSTOMS, DELHI 2003 (7) TMI 74 - SUPREME COURT dealt with the over invoicing of export goods, and held that, when the importation or exportation, of the goods are subjected to certain prescribed conditions to be fulfilled either before or after clearance of the goods, and if those conditions are not fulfilled, the said goods would be considered as prohibited goods and Sections 2(23), 11 and 113(d) of the Customs Act, 1962 would come into play and the exporters would be liable for penalty - In a catena of decisions of the Tribunal in respect of cases of over valuation of export goods for benefit under export incentive schemes, the imposition of penalties under Section 114 of the Customs Act, 1962 has been upheld. Delay in adjudication - HELD THAT - It is noted that there were several noticees in the show cause notice, which by itself would lend to the delay in adjudication. We are not inclined to accept this contention of the learned counsel. The impugned order is upheld - appeal dismissed.
Issues Involved:
1. Imposition of penalty under Section 114(iii) of the Customs Act, 1962. 2. Imposition of penalty under Section 114AA of the Customs Act, 1962. 3. Comparison with co-noticee's case (Mr. Alip Kumar Das). 4. Appellant's role and involvement. 5. Delay in adjudication. 6. Validity of the impugned order. Summary: 1. Imposition of penalty under Section 114(iii) of the Customs Act, 1962: The appellant was penalized Rs. 10,00,000/- under Section 114(iii) of the Customs Act, 1962, for attempting to export goods improperly by submitting forged invoices of overvalued goods to claim undue export incentives. The Tribunal found the appellant, a partner in M/s. Aan Impex General Trading LLC, Dubai, complicit in the fraudulent activities, as he received 30% of the profits and was aware of the overvaluation of export goods. 2. Imposition of penalty under Section 114AA of the Customs Act, 1962: The appellant was also penalized Rs. 20,00,000/- under Section 114AA of the Customs Act, 1962, for knowingly making, signing, or using false or incorrect material in the transaction of business under the Act. The Tribunal upheld this penalty, citing the appellant's admission of signing false documents and his active involvement in the fraudulent export scheme. 3. Comparison with co-noticee's case (Mr. Alip Kumar Das): The appellant argued that his case was on a better footing compared to Mr. Alip Kumar Das, whose penalty was reduced by the Tribunal. However, the Tribunal distinguished the appellant's role as a partner receiving profits from the fraudulent activities, unlike Mr. Das, who was an employee following instructions without personal gain. Thus, the Tribunal did not accept the appellant's submission for reduced penalty. 4. Appellant's role and involvement: The Tribunal noted that the appellant was a partner in the Dubai-based firm and was aware of the modus operandi involving overvalued invoices for export goods. The appellant's statements and evidence indicated his knowledge and participation in the fraudulent activities, justifying the penalties imposed under Sections 114(iii) and 114AA of the Customs Act. 5. Delay in adjudication: The appellant contended that the delay of over six years in adjudicating the show cause notice rendered the order unsustainable. However, the Tribunal dismissed this argument, noting that the complexity and involvement of multiple noticees justified the delay in adjudication. 6. Validity of the impugned order: The Tribunal upheld the impugned order, rejecting the appellant's arguments regarding the invalidity of the order due to non-mention of specific sections in the show cause notice and delay in adjudication. The Tribunal emphasized that the role and charges against the appellant were clearly mentioned in the show cause notice, and the penalties were rightly imposed based on the appellant's admitted involvement in the fraudulent export activities. Conclusion: The Tribunal dismissed the appeal, upholding the penalties imposed on the appellant under Sections 114(iii) and 114AA of the Customs Act, 1962, for his role in the fraudulent export scheme and use of false documents.
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